UBS upgraded Nio (NYSE:NIO) to Buy from Neutral and raised its price target to $8.50 from $6.20, sending shares up more than 5% in intraday trading Tuesday.
The firm said Nio’s latest product lineup should help attract consumers, while a $1 billion equity offering had strengthened its financial position and visibility. UBS projected Nio would hold net cash of RMB 21 billion by the end of 2025 and reach free cash flow breakeven in 2026.
With upward revisions to consensus revenue and earnings estimates, UBS said Nio’s valuation gap relative to rival XPeng should narrow. The new target of $8.50 was based on 1.0x projected 2026 price-to-sales.
